Dollar Tree Debt
DLTR Stock | USD 69.46 1.44 2.03% |
Dollar Tree holds a debt-to-equity ratio of 1.251. At this time, Dollar Tree's Short and Long Term Debt Total is relatively stable compared to the past year. As of 10/08/2024, Net Debt is likely to grow to about 10.2 B, while Net Debt To EBITDA is likely to drop (0.73). . Dollar Tree's financial risk is the risk to Dollar Tree stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
Dollar Tree's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Dollar Tree's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the Company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Dollar Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Dollar Tree's stakeholders.
For most companies, including Dollar Tree, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Dollar Tree, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Dollar Tree's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book 2.0656 | Book Value 34.326 | Operating Margin 0.0275 | Profit Margin (0.03) | Return On Assets 0.0457 |
Dollar |
Dollar Tree Bond Ratings
Dollar Tree financial ratings play a critical role in determining how much Dollar Tree have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for Dollar Tree's borrowing costs.Piotroski F Score | 8 | Strong | View |
Beneish M Score | (2.75) | Unlikely Manipulator | View |
Dollar Tree Debt to Cash Allocation
Many companies such as Dollar Tree, eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
Dollar Tree currently holds 10.39 B in liabilities with Debt to Equity (D/E) ratio of 1.25, which is about average as compared to similar companies. Dollar Tree has a current ratio of 1.35, which is within standard range for the sector. Note, when we think about Dollar Tree's use of debt, we should always consider it together with its cash and equity.Dollar Tree Total Assets Over Time
Dollar Tree Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Dollar Tree uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.Dollar Tree Debt Ratio | 4.88 |
Dollar Tree Corporate Bonds Issued
Dollar Short Long Term Debt Total
Short Long Term Debt Total |
|
Understaning Dollar Tree Use of Financial Leverage
Dollar Tree's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Dollar Tree's current equity. If creditors own a majority of Dollar Tree's assets, the company is considered highly leveraged. Understanding the composition and structure of Dollar Tree's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
Last Reported | Projected for Next Year | ||
Short and Long Term Debt Total | 10.4 B | 10.9 B | |
Net Debt | 9.7 B | 10.2 B | |
Short Term Debt | 1.5 B | 1.6 B | |
Long Term Debt | 3.4 B | 2 B | |
Short and Long Term Debt | 225 M | 337.4 M | |
Long Term Debt Total | 3.1 B | 3.8 B | |
Net Debt To EBITDA | 6.30 | (0.73) | |
Debt To Equity | 0.68 | 0.06 | |
Interest Debt Per Share | 23.02 | 0.16 | |
Debt To Assets | 0.22 | 0.05 | |
Long Term Debt To Capitalization | 0.32 | 0.03 | |
Total Debt To Capitalization | 0.40 | 0.06 | |
Debt Equity Ratio | 0.68 | 0.06 | |
Debt Ratio | 0.22 | 0.05 | |
Cash Flow To Debt Ratio | 0.54 | 3.80 |
Additional Tools for Dollar Stock Analysis
When running Dollar Tree's price analysis, check to measure Dollar Tree's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Dollar Tree is operating at the current time. Most of Dollar Tree's value examination focuses on studying past and present price action to predict the probability of Dollar Tree's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Dollar Tree's price. Additionally, you may evaluate how the addition of Dollar Tree to your portfolios can decrease your overall portfolio volatility.
What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.